Target (NYSE:TGT) has finally secured a location for its first brick-and-mortar store in New York City, marking a milestone for the retailer which has long opened pop-up shops there while scouting real estate and fine-tuning its formats.
The small-format unit is scheduled to open in 2016 in the Tribeca neighborhood near the Financial District, according to Fortune. The two-level, 45,000 sq. ft. location will cater to tourists and residents of the wealthy neighborhood—the median household income there is $216,037 per year.
"We're thrilled we're finally going to make it there," Anne Stanchfield, Target's VP of flexible formats and localization, told Fortune. "This is the site we're most excited about in terms of having a great neighborhood and a mix of tourists, office workers and young families."
Flexible format is Target's new name for its small-store initiative. The retailer had called its previous variations City Target and TargetExpress, but dropped the distinctions earlier this year and rebranded them under the Target banner.
The name change reflects Target's goal to become flexible in how it fits into different communities. To accomplish this, the retailer is experimenting with both store formats and merchandising, and recently began testing locally relevant assortments in a handful of stores in the Chicago market.
These flexible formats are key to Target's growth. Not only do the small footprints allow the retailer to enter more dense urban locations, but the units are bringing a big pay off—higher sales per square foot and higher gross margin rates than the company average.
It's also helping to win younger shoppers, many of whom live in urban centers.
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